Lloyds mortgage distribution strategy on the move

Former Lloyds Banking Group sales director of mortgages Nigel Stockton is rarely undone in his tipping but recent events at Halifax have seen one of his new-year forecasts turn out to be a losing punt.

Stockton predicted a 50/50 split between intermediated and direct business for Lloyds this year, a forecast which compared unfavourably with Santander’s 80/20 dynamic.

Mortgage brokers will know Halifax’s product suite is truly re-energised and the 2.99 per cent tracker at 75 per cent loan to value is evidence of that. So what inspired the prodigal return? My own hunch is that the arrival of António Horta-Osório has played no small part.

The words strategic review can strike fear into management teams at all levels and it is already clear that the new boss is cracking heads. And not before time in certain places where an aversion towards intermediated business had crept in.

There has been a trade-off between margin and market share and one win-win result for the lender and its inter-mediaries has been the re-emergence of Halifax’s premier unit. This is more than 10 years old and was the prototype by which many mainstream lenders sought to differentiate on service. Sheila Palmer and her team were one of the reasons why, in its day, Halifax was garnering £40bn in annual loan volume.

The demise of Cheltenham & Gloucester as an intermediary will have compen-sations. Lloyds’ intra-brand product design can now be streamlined and the premier team can take up the slack.

Intermediaries are still in debt to Santander for the role it took in keeping many brokerages in business over the past two years but a sustainable competitive environment had been lacking.

Moreover, we are starting to see other lenders throw off their shackles. Nationwide will lend more this year than last, Clydesdale is making a positive impact and building societies’ best buys are prominent in comparison tables led by the intermediary-friendly Coventry.

Horta-Osório will be familiar with the Spanish proverb “la unión hace la fuerza”, meaning “together we are strongest”. Beginning again is the first step.

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